Net Promoter Score (NPS): What It Is and How to Use It

Net Promoter Score (NPS) is a metric that shows how many of your customers are willing to recommend you to others. Customers answer one question on a 0 to 10 scale, you group them into promoters, passives and detractors, and you subtract the percentage of detractors from the percentage of promoters. The result sits between -100 and +100.

Why read a whole guide on one number? Because NPS is one of the few eCommerce KPIs that gives you a glimpse into the future, and it is also one of the most misread. This guide covers the basics and the principles we have learned helping hundreds of eCommerce companies improve their customer satisfaction and customer loyalty. Where a topic deserves its own deep dive, we link to it.

Grab a cup, grab a notepad, let's start!

What is Net Promoter Score (NPS)?

Fred Reichheld of Bain & Company created NPS together with Satmetrix and introduced it in the Harvard Business Review article "The One Number You Need to Grow" in December 2003. Net Promoter® and NPS® are registered trademarks of Bain & Company, Satmetrix Systems and Fred Reichheld.

The wording of the survey question can vary with your business model and intent, but the standard scale runs from 0 (not at all likely) to 10 (extremely likely). Each answer puts the customer into one of three groups:

For a closer look at each group and how to treat it, read promoters, passives and detractors in NPS.

Valentin Radu, CEO at Omniconvert, sums up how NPS should be used in eCommerce:

"Check the difference in customer experience between two key moments in your customers' journey: pre and post-delivery. This way, you will know if your company actually respects the principle of under-promise and over-deliver and if your customer expectations are being matched by what you promised through your marketing. If you do track the Net Promoter Score, you have to look beyond the average score and go granular by segmenting the NPS responses."

How do you calculate NPS?

Worked example

You collect 200 survey answers: 110 promoters, 50 passives and 40 detractors.

• Promoters: 110 ÷ 200 = 55%
• Passives: 50 ÷ 200 = 25%
• Detractors: 40 ÷ 200 = 20%

NPS = 55 − 20 = 35. The score is written as a number, not a percentage.

Some businesses calculate NPS in a trusty spreadsheet, some use an NPS calculator, and some prefer an integrated tool that connects to their eCommerce platform and email marketing tool. Our roundup of NPS software compares the options.

What is a good or bad NPS?

People often look for an NPS benchmark or ask what a good score is. It would be wrong to generalize, but any NPS above 0 is a good sign: it shows promoters outnumber detractors. Any negative score is bad, so stay positive.

A low or negative NPS is a sign of worry for any business. It means many customers are disappointed by what you offered, and it gives you a clue about falling revenue and retention. For sector-level comparisons, read NPS benchmarks by industry and what makes a good NPS score.

One warning: an average NPS can easily become a vanity metric to brag about in meetings. The point of NPS surveys is to improve customer experience and satisfaction based on what real customers honestly think of your brand and your products.

Why is Net Promoter Score important for eCommerce?

Revenue and other financial KPIs show you the past, and you cannot change the past. NPS shows where your customer relationships are heading, so you can change what you do now. By measuring and monitoring it, you always know what you need to fix to improve customer loyalty. Keeping existing customers happy comes first: happy customers become promoters, and promoters attract more people to your business.

NPS is closely tied to word of mouth, customer retention rate and customer lifetime value. If you measure it correctly and act on it with a clear method, your loyal, happy customers will carry your company through difficult conditions.

We can't talk about the importance of NPS without mentioning Fred Reichheld, one of the greatest advocates of customer loyalty as a source of growth. In a 2020 Fortune feature, which reported that at least two-thirds of the Fortune 1000 use the Net Promoter Score, Reichheld described his work as "focused on loyalty and treating people right." He found that "companies that focus on earning the loyalty of customers are taking over the world": they make higher profits, pay and keep employees longer, and reward investors better. He created NPS because leaders needed a simple metric to answer one question: "Are we winning or losing with our customers?"

Three principles to follow before you start monitoring NPS

1. Mind the gap: pre-delivery NPS versus post-delivery NPS

Most companies measure NPS only after an order is delivered. But to understand the whole customer experience in your store, measure it at two key moments: before and after delivery.

• Pre-delivery NPS asks customers about their experience on your website and in checkout: what happens before delivery.
• Post-delivery NPS asks about the products they ordered, once they start using them.

This shows whether your company really follows the "under-promise, over-deliver" principle. Without this extra layer, NPS is just an average that lacks an actionable side, like so many other over-hyped and underused metrics. The difference between the two scores is called the Delivery Gap:

A large negative delta means the store promises more than it delivers. You usually see the biggest gap on the first order, because newly acquired customers are not buying the product yet; they are buying the marketing around it.

2. Treat objections in real time, not after one quarter. Or worse, never.

Customers expect their problems solved fast. They don't want a call two or three days after an incident, and they certainly don't want to be ignored. Yet many companies monitor NPS through external providers who send questionnaires to customers, and then… nothing happens. That's not a healthy approach.

To help you know when and how to act, we created a blueprint for monitoring and using NPS. You can download the full-resolution blueprint here. It covers both pre-delivery and post-delivery NPS, with suggested scenarios based on the score a customer gave and on their RFM segment (explained below).

Only when you collect NPS data and act on it in real time can you defuse the ticking bombs your unhappy customers signal, the ones whose expectations you haven't met.

3. Look beyond the average: segment NPS responses

Averages are misleading, and NPS is no exception. It measures sentiment across groups of customers with different buying behavior, who live in different cities and order different products. As Valentin Radu puts it:

"The challenge is that calculating the average Net Promoter Score removes the most interesting facts from your analysis. Like, basically, it's just indicative, like any average score. On average, the temperature on planet earth is 21 degrees. Not useful if you plan a trip to Alaska in bikinis, right?"

To find the truth behind your scores and make data-driven decisions, look at NPS from different angles:

• Pre-delivery NPS versus post-delivery NPS
• NPS by RFM segment
• NPS by brand, product or category
• NPS by location
• NPS by channel

Use tools that let you segment NPS responses, so you know exactly which customer segments, brands, cities or commercial tactics produce the most promoters and the most detractors. And before paying for an NPS tool, be sure you know what return you want from it: an average, post-purchase-only score with no strategy behind it won't cut it.

How to analyze NPS from different angles

NPS is more than one more KPI on your list; it is a source of insight for the whole company. Is a valuable segment unhappy with what you delivered? Is one brand dragging your score down? Do you get lower scores from a particular city? Does one category cause more problems than the others? Each angle answers a different question:

For a step-by-step method, including how to code open-ended answers and find root causes, read our guide to NPS analysis.

Pre-delivery and post-delivery NPS

Measuring NPS at both moments shows what creates satisfaction or dissatisfaction, and where to focus your effort. A low pre-delivery NPS shows you need to improve the online experience. A low post-delivery NPS shows that what customers receive is below what you promised.

One fashion store we worked with measured both scores to understand its high churn rate. Besides long delivery times, which the company already knew about, customers were disappointed by product quality: there was a large gap between the quality shown on the site and the products that arrived.

NPS by RFM segment

Not all customers are created equal. One of the most reliable ways to find your most valuable ones is RFM analysis (Recency, Frequency, Monetary value), which surfaces the groups of customers that matter most once you balance acquisition cost against the margin they generate. RFM segmentation then groups customers by their RFM score, so you can treat each cluster according to its behavior. That brings higher response rates, more loyalty and a better customer lifetime value.

Monitoring NPS by RFM segment helps you:

• Allocate customer service resources according to customer value, so the customers who matter get the best relationship.
• Build loyalty programs and experiences around the voice of your most important customers, and improve retention.
• Improve customer lifetime value, prevent churn, and increase both satisfaction and loyalty.

As Juliana Jackson said, mixing NPS with RFM segments helps you focus your efforts on your top customers:

"In eCommerce, the customer support team deals with a considerable volume of customers and tickets every day, and sometimes, it becomes harder to prioritize amongst customers. I mean, let's face it. Not all of the customers are made out of honey, and funny enough, the ones that are bringing the lowest value to a brand are the most demanding, and they are adding up the most to the Cost of Service. Using a mix of transactional data from RFM and real-time NPS responses, you can send your most valuable customers to your support team and help them prioritize work based on the customer's value and their satisfaction with your brand. [...] Plus, you can also identify anomalies with your products, shopping experience, delivery, and services."

We call the group with the highest RFM score "Soulmates": your most loyal and valuable customers. They generate a significant share of your revenue and margin, and they are the main reason your company grows. You don't want to let them down.

Here's proof that the average NPS alone is misleading. In one store's post-delivery data for December 2020, the average NPS was 63.89, but the NPS among Soulmates was lower, at 53.85, down from 77 in November and 100 in October. If this were your store, you would want to find the root of the dissatisfaction among your most valuable customers right away. Monitoring NPS by RFM segment lets you act while the problem is still fresh.

NPS by brand, product or category

Sometimes your best products can become your worst. Say you add a new brand to widen your range, and it becomes a best-seller: the prices are attractive, the images are appealing. But what if the people who buy it are disappointed and never return to your store again?

NPS is directly linked to future purchase intent. Measuring pre- and post-delivery NPS by product, brand or category shows whether you have a marketing problem (you over-promised) or a problem with specific items. It helps you prevent churn, improve your assortment and adjust your marketing campaigns. The reverse works too: in one store, two categories (brown and black jackets) received the maximum post-delivery NPS. If high-value customers buy those items and the margins are good, the marketing team can build a campaign around them.

NPS by location

If you sell across states, regions or countries, NPS by location shows how delivery times affect satisfaction. In one example, customers in Texas and Pennsylvania gave the lowest scores. If many of the store's most valuable customers live in those two states, management should prioritize delivery improvements there.

NPS by channel

Customers are now omnichannel: they research online and buy offline, or the other way around. Compare NPS across channels. In one example, "phygital" customers who bought both online and in store scored lower than online-only buyers, while store-only customers scored highest. The feedback behind that gap tells you what to fix to create a seamless omnichannel experience.

What questions should an NPS survey ask?

NPS surveys give you both quantitative and qualitative data. Most companies use the textbook question:

That covers the quantitative side. To collect qualitative data too, add open-ended follow-up questions, ideally a different one for each group:

• For detractors: "We're sorry you didn't have the experience you'd been expecting. What exactly did we do wrong?"
• For passives: "What could we do to offer you an even better experience?"
• For promoters: "We're glad you're happy with the experience we prepared for you. What did you value most in your experience with our store?"

The good news: customers usually tell you what needs improving whether they rated you 1 or 10. For more ready-to-use wording, see our NPS question examples, the NPS survey template and NPS survey best practices.

Adapt the question to the moment

The golden rule for NPS in eCommerce: always measure it pre-delivery and post-delivery. The right questions at the right moment also help you prevent buyer's remorse, as Jonathan Ivanco, Co-Founder at Formtoro, said:

"As soon as a purchase is made, there is a doubt that sets in. Invariably, the first thought a person has is, 'Did I make the right decision? Is this product going to be worth it?' Post-purchase, pre-delivery requires appropriate data collection that reinforces the notion that the customer made the right decision. Rather than asking about where they found you, ask about what they are most looking forward to in their purchase, be creative, lean into reaffirming the purchase. Then follow up with the customer to ensure their expectations were met. Finish the customer journey and fill in the breaks where doubt can set in."

Say a woman buys a dress from an online clothing store to wear at her best friend's wedding. The store could adapt the NPS question into two surveys:

1. Pre-delivery: "How confident are you that the dress is going to fit you?"

   This measures her sentiment based on the website experience and the expectations the store created.
2. Post-delivery: "How did the dress fit you?"

   This shows whether the product she received matched, or beat, what was promised before delivery.
3. Follow-up: ask why

   Depending on her answers, send an open-ended question that explains the score she gave.

Adapt any NPS survey to your business. Be creative and don't use it the way everyone else does: think about the questions that fit your business model and your products, and ask them pre- and post-delivery. On-site and post-purchase surveys in Omniconvert Explore can collect the answers.

NPS works best alongside other feedback metrics. To see when to use CSAT or Customer Effort Score instead, read NPS vs CSAT vs CES. To turn your promoters into a growth channel, read how to use NPS in your marketing campaigns. And because customer experience is the sum of every interaction across the customer lifecycle, NPS is a good way to measure and monitor customer sentiment over time. To learn how NPS fits into customer value optimization, visit CVO Academy.

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